Spain’s domestic economy is booming, or so the story goes, and in no small part this boom comes thanks to the arrival of what is being termed the “good kind of deflation”, the sort everyone would like to have, a world where prices fall, real incomes rise, jobs are created, and everyone gets to live … Read more
Davos was crowded with the usual representatives of the top 1%: CEOs, technologists, representatives from the major banks, and the occasional head of state. This year, there were discussions about the ECB’s quantitative easing program, which was announced during the conference, and the Swiss National Bank’s recent decision to remove its peg on the Swiss … Read more
For our Spanish speaking followers, my Modern Money Primer has just been released in Spanish and is available: https://www.amazon.es/Monetaria-macroeconom%C3%ADa-sistemas-monetarios-soberanos/dp/3944203097/ref=sr_1_3?ie=UTF8&sr=8-3 Here’s the description of the book: El esfuerzo intelectual que se realizó en el campo de la física tras la aparición de la teoría de la relatividad o del modelo copernicano, no se llevó a cabo … Read more
Remember the 1960s? The 1970s? Back then, inflation surged from one peak to another but failed to deliver the low unemployment rates promised by the Phillips curve. In fit of frustration, economist Arthur Okun invented what he called the misery index—the sum of the inflation and unemployment rates. As the following chart shows, those were … Read more
Governor Erdem Başçı did indeed save the best for last during his briefing on the Central Bank’s first Inflation Report of the year on Jan. 28. At the Q&A session, he said the monetary policy committee (MPC) would cut interest rates at an emergency meeting on Feb. 4 if annual inflation fell more than one percentage point in January. Here is … Read more
With Syriza in the driver’s seat, Greece now has some hope for the end to austerity imposed by Germany and the Troika. Here’s a good short piece by C. J. Polychroniou, a research associate and policy fellow at the Levy Economics Institute. As he explains, what Syriza wants is no more—and no less—radical than what … Read more
In its early days, the Eurozone was seen as a powerful competitor to the United States for economic dominance—perhaps especially to American tourists attempting to navigate unfavorable exchange rates during the early 2000s. Real tests of strength, however, come at times of crisis. As the Eurozone stumbles out of the turmoil brought about by the … Read more
The Charlie Hebdo attack has led many to claim that – or at least question why – Islam is associated with terrorism. I would reverse the order of causality the question implies. We must first try to answer why there are so many terrorist organizations linked to radical Islam. The attack led me to read, … Read more
There has been much speculation in recent months whether the price of oil will continue its downward spiral to spine chilling levels – $20 per barrel springs to mind. One can almost sense a slight quiver in the voices of investors and oilmen when asked how they would cope with such a scenario. Some argue … Read more
I had very high expectations from “The Grand Budapest Hotel”, the latest Wes Anderson movie which was nominated for nine Oscars on Jan. 15, four days after winning the best musical or comedy at the Golden Globes on Jan. 11. Not only because I am big Anderson fan, but also because the movie is inspired … Read more